Rational Conflict

A brief history of Rational Conflict

Rational Conflict was my first (single-authored) book. Its origins lie in my PhD thesis even though it shares not a single word with that document. The thesis was a typically dry microeconometric investigation of various parametric optimisation models of industrial strike activity.

Although intensely proud of my PhD thesis at the time, soon after I realised I did not want to publish it as a book. Indeed, within months I had laid it to rest on some dusty shelf never to be retrieved again. The reason was twofold:

  • First, disillusionment with econometric analysis (once I grasped the enormous chasm separating that which we are actually testing from the theory we pretend to be testing). Secondly, because soon after completing my thesis I was taken with game theory and the following conundrum that it posed for anyone interested in conflict:

If we could have developed a brilliant theory of conflict, then the possibility of rational conflict (that is, of conflict between rational agents) would, necessarily, wither (as well-informed rational antagonists would have no reason to go through the motions of ‘fighting’).

This paradox struck me as an excellent opportunity to cast a critical gaze on the foundations of game theory in particular and neoclassical theory in general. Thus the seed of Rational Conflict entered my mind while I still lived in the UK (and taught at the University of East Anglia).

The actual book began to take shape after I moved to Sydney, Australia, in 1988. Thanks to the generosity of the Economics Department at the University of Sydney (they allowed me a lengthy teaching-free period right at the outset), I got down to work. The book saw the light of day in 1991 (Oxford: Blackwell). 

As is often the case, Rational Conflict, being my first book, was written for myself, even though I was under the illusion (while writing it) that it was meant to appeal to large numbers. Soon after its publication I realised that only a handful of those who cared about the philosophical and political issues raised by the book also possessed the technical skills to follow the argument. Meanwhile, those who had the technical skills lacked the interest in the political philosophy of the enterprise. 
Still, I was glad I wrote it thus confirming that I had, essentially, written it for myself. I suppose that we all deserve to write one book for ourselves. Nonetheless, at that stage I resolved that any future books would be readable by those whom they might benefit the most.

Dust cover blurb

Rational Conflict

Conflict is a disconcerting notion. It brings to mind war, strikes, discord and, to the horror of economists, inefficiency. These days, when social scientists are urged to adopt game theory in their pursuit of social explanation, a theory of conflict becomes a study in the failings of common sense or of communication difficulties experienced by agents. In any case, conflict is seen as a technical difficulty calling for a technical solution.

In this path-breaking book, Yanis Varoufakis rejects this perception as too impoverished. Starting with a demystification of game theory and using examples from industrial relations, diplomatic games, hostage crises and the law, he places its findings in a philosophical perspective and argues that there is a lot more to conflict than in immediately obvious. However disagreeable it may be within a popular culture, conflict possesses a creative edge and forms a crucial symbiotic relationship with Reason and Liberty that is in danger of being obscured if the sirens of game theory are heeded.

Table of Contents

Preface and Acknowledgements      

Part I Preliminary Perspectives 

Chapter 1 Introduction                                 3 

Chapter 2 Reason and War  

Reason’s narrow gate                                      15 
Parametric and strategic perspectives     24 
Fighting for freedom I                                    25 
The enemy within                                             28 
Conclusion                                                           31


Part II Game Theory: Concepts and Critique                                                        

Chapter 3 Foundations of Equilibrium Conflict          

The Leviathan trap                               37 
Deliverance                                              41 
Equilibrium reluctance                        64 
Conclusion                                                75

Chapter 4 War and Peace as Games

Inescapable Carnage                            82
Logic’s backward march                     90
Conclusion                                              100

Chapter 5 Conflict by Agreement

Conditions for communication                   104 
Informational equity and consensus        113 
Information inequity:
a chance for conflict?                                     129 
Conclusion                                                         136 

Chapter 6 Conflict Beyond Equilibrium

The illusive paradox                                   141 
Counterfactuals and
conditional probabilities                         146 
Mixed feelings, mixed strategies            151 
Backward versus forward induction:
the Cunning of Reason                             159 
Rationalizable conflict                             173

Part III Reason, Conflict and Emancipation 

Chapter 7 Praxis and the Self                               

The consequences of indeterminacy                185 
Dualism contra dialectics                                   195 
Praxis and Sartre’s theatre:
the struggle for self-realization                        206 
Erasure versus synthesis:
the post-modern challenge                                 212 
Conclusion                                                               220 

APPENDIX: Explaining conflict as an investment in lower risk aversion   224

Chapter 8 Social Conflict and Liberty

Beyond the cave                                  230 
The origins of solidarity I:
coalitions, norms and evolution              236 
The origins of solidarity II:
history versus evolution                           243 
Fighting for freedom II                             257 
Conclusion                                                     275 
Bibliography                                               285 
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